This research project will study the demand facing individual physicians in the physicians' services market in an attempt to determine how competitive the market really is. First, an economic model of the physicians' services market will be constructed. This model will generate a system of simultaneous equations as well as several testable hypotheses concerning the demand facing individual physicians. Second, econometric regression techniques will be employed to estimate the demand curve for services from individual physicians and test the hypotheses. The data will also be used to evaluate whether traditional economic models of market structure and behavior accurately describe the physicians' services market. Finally, the empirical results will be interpreted and used to predict the impact of recent policy proposals designed to contain the costs of physicians' services. Throughout the study, particular emphasis will be placed on the effect of competing physicians' prices on the demand facing an individual physician. The estimated demand curve will be tested to see whether individual physicians possess market power; that is, can a physician raise his fees above those charged by other physicians in the market without appreciably affecting demand? Or will patients respond to price increases by switching to lower-priced physicians? Because physicians may be differentiated by more than price, the demand curve will also be analyzed to determine what effects physician characteristics, such as experience, quality, and specialty, and market factors, such as personal income, information, and physician-to-population ratios, have on market demand. In addition, the data will be tested for the presence of time trends in order to discover whether innovations in physician practice organization and delivery, cost containment programs or the growing supply of physicians have recently made the market more competitive.